Franchisors: It's time to get back into the real estate business

A few weeks ago I gave a presentation at a technology
briefing sponsored by a major computer hardware manufacturer. The audience was
a small group of executives from a large real estate corporation.

I shared my perspective on how mobile technology and inexpensive
software applications were already helping thousands of real estate
practitioners work smarter and cheaper while delivering a superior customer

It was clear, I argued, that their offices could perform
more profitably and improve their service by adopting such tools. When I was
done I received no disagreement. But two statements were offered immediately:

“Our offices are
franchised and our agents are independent contractors so we can do little or
nothing to deploy this”

“As a franchisor, we
are most interested in the software system that tracks and collects our
franchise fees”

I told them I understood this, having been in real estate
and technology for ten years. But surely now, as consumers question your value
and your franchisees lose money, you must be looking more seriously at these

Not so much.

It made me think that these folks needed to get as serious
about the real estate business as
they were about the franchise sales

Let me illustrate what I mean by that. Consider, if you
will, another franchise: McDonald’s. This company is in the business of selling
franchises too. But they also obsess on product – they are in the restaurant business.

Eric Schlosser’s 2001 book, Fast
Food Nation
, documents this. For better or for worse, McDonald’s spends
an inordinate amount of time calibrating the appeal of the product their franchisees
offer. Flavors are created and tested in laboratories. Products are conceived
of, tested against and marketed to specific segments of the market. Every
single thing the customer sees, smells, touches and tastes when they walk into
a McDonald’s restaurant has been vetted a hundred times over. Standards are
militantly enforced. Consistency is a mandate.

I think the days when a franchisor can simply offer a logo
(as opposed to a full realized and properly cared for brand), some advertising cover, a little bit of training and a few
pieces technology and expect to collect royalty checks are coming to a close.

The future belongs to those companies that stop throwing up
their hands and start getting them dirty in the hard business of real estate.

Brian Boero